This Week in Financial Regulation, July 7th

This Week in Financial Regulation, July 7th

News and Commentary

In a post at Banking Exchange, staff cover the recent increase in dividends by a handful of large US banks following their results in Fed stress tests.

In an opinion piece, Brookings Senior Fellow Aaron Klein discusses the massive disparity in overdraft fees between big and small banks. While big banks receive billions of dollars in overdraft fees, they are far from reliant on these fees. However, as Klein argues, there are a number smaller banks that rely heavily on overdraft fees.

In a post on the Liberty Street Economics blog of the New York Fed, Manthos Delis, Fulvia Fringuellotti, and Steven Ongena discuss their new paper in which they examine the relationship between credit, income, and inequality. They find that “being approved for a loan implies an increase in the recipient’s income of approximately 6 percent one to three years after the loan decision, and an increase of 11 percent five years after.”

In a policy brief for the Mercatus Center, Stephen Matteo Miller summarizes research showing that “the rise in [US bank] holdings of excess reserves coincides with the US Basel III capital final rulemaking, which predated the US Basel III liquidity final rulemaking by one year.”

New Research

In a VoxEU article, Michael Ehrmann, Robin Tietz, Bauke Visser examine how the voting rights of Reserve Bank presidents affects their behavior and how financial markets respond to presidents’ speeches based on their voting rights.

In a VoxEU article, Philipp F. M. Baumann, Enzo Rossi, Michael Schomaker examine the relationship between central bank independence and inflation. Their analysis suggests that no meaningful relationship exists, contradicting popular belief of a significantly negative correlation. In fact, they cannot even rule out the existence of a positive correlation.

In a VoxEU article, Thomas Lambert, Enrico Perotti, Magdalena Rola-Janicka summarize new research presented at the CEPR conference on the Political Economy of Finance.

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By |2021-07-07T14:26:09-07:00July 7th, 2021|Blog, Financial Regulation|